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The Appetite of Leviathan

"Money replaces the culturally mediated `cosmos' so that the common interest of society appears objectified, not human. Every pack of wolves is organized more socially than free enterprise persons..To Thomas Hobbes, society in the `state of nature' is nothing but the `war of everyone against everyone else'. Hobbes did not describe the `nature' of human society but rather the historical result of a process..The state share has strongly increased everywhere." From German
The Appetite of Leviathan

Privatization and the "Austere State": an Illusion

By Robert Kurz

[This article is translated from the German on the World Wide Web,  http://www.giga.or.at/others/krisis/r-kurz_appetit-des-leviathan.html.]

Two souls wrestle in the breast of the modern person: the soul of money and the soul of the state. The "homo oeconomicus" is always simultaneously a "homo politicus". The institutional polarity of the market and the state corresponds to this structural splitting of the individual. This fissure did not exist in pre-modern societies however they may be judged. Rather a cultural unity or "cosmos" prevailed to which the different social activities were subordinated. The modern goods-producing system has destroyed the "cosmos" of the old cultures without producing a new cultural order. Instead the relation of economy and social order was turned upside down. The economy is no longer a function of an overarching culture. "Human society has fallen into an accessory of the economic system" (Karl Polanyi).

This means people by themselves do not have any social and cultural connection in this system beyond economic activity. They become "abstract individuals" or "isolated persons" who look desperately similar to the "windowless monads" of the philosopher Leibnitz. Their social connection is only produced negatively through economic competition. Money replaces the culturally mediated "cosmos" so that the common interest of society appears objectified, not human. Every pack of wolves is organized more socially than free enterprise persons.

In the early period of this absurd system, the English philosopher Thomas Hobbes (1588-1679) described the person as an egoistic being who by nature is more lonely than an animal. Therefore society in the "state of nature" is nothing but the "war of everyone against everyone else". Hobbes did not describe the "nature" of human society but rather the historical result of a process where the first thrusts of the modern market economy began to dissolve the old community. The new freedom of individuals was only the freedom to submit to the coercive laws of competition. So individuals did not completely tear each other to pieces, Hobbes constructed the state as a necessary coercive authority standing above egoistic individuals to which he gave the name of the biblical monster "Leviathan". The little monsters of free enterprise individualism should be tamed by the enormous monster state "Leviathan". What a sophisticated society that leaves nothing to be desired in maliciousness!

The "Leviathan" is not an institution of common cultural and social community any more than the free wild course of the market. The state does not annul the total competition but is only a repressive authority external to "windowless" individuals, a machine that sets the common emergency conditions for the raving mad subjects of the market, comparable to the umpire of a rugby game. Nothing has changed in this characterization since Hobbes. More than ever, free individuals today submit as beings made socially incompetent by the market who therefore must be put in legal and bureaucratic strait-jackets by the monster of the state machine.

In this "best of all worlds", there is unfortunately a little logical blemish. Like all monsters, Leviathan is rather voracious. The question is how should he be fed. The incompetence of competing individuals is shown in their insensitiveness to their own social and natural conditions of existence. This is also the problem of the state economy. The state is by no means a "non-economic factor" as often assumed since the state must be financed (and money is doubtlessly a thoroughly "economic factor"). The state constitutes a secondary economy, the economy of common conditions of existence for individuals competing in a free enterprise way. By definition the subjects in the "state of nature" of competition do not voluntarily surrender a penny. The state monster must forcibly collect its own costs (which are nothing but the social "business expenditures" of the market economy) and forcibly hinder free individuals from devouring one another hook, line and sinker.

The great monster should easily prevail against the little monsters. However the "business expenses" of the market economy unfortunately become ever greater in the course of time. The more people were individual subjects of competition, the greater was the need for a legal and police state regulation of their relations and the more strongly were machines of justice and administration inflated. The Byzantine empire can be compared with the bureaucratic Moloch that modern western democracies produced. Still this is not everything. The more competition led to the scientization of production and the application of massive technical aggregates, the more it massed together great human multitudes in urban agglomerations. The greater the need for a social logistics and infrastructure, the more the state had to provide material, technical and organizational conditions for lively free enterprise activity: from schools and universities and building streets and airports to sewage and waste removal. Lastly, the follow-up costs also increased. The more people were socially uprooted by the market economy, the more intensely the social transaction costs of the state rose. The more the natural environment was strained and destroyed by narrow-minded economic rationality, the higher the state expenses rose for emergency ecological repairs.

Ignorant economic liberalism arising in the late 18th century wanted to know nothing of these costly problems. In his "bee fable", the brilliant cynic Bernard de Mandeville (1670-1733) argued that the sum of ruthless pursuit of profit would assure quasi automatically the welfare of the community. This notion remains the most important argument today for the justification of economic liberalism. As everybody knows, Adam Smith (1723-1790), the classical author of political economy, adopted this argument. According to his theory, the "invisible hand" of the market can regulate the whole reproduction of society much better than the state. This economic liberalism did not fundamentally contradict the state philosophy of Hobbes. The "Leviathan" should include that social and economic activity while simultaneously fulfilling its function as a repressive monster, forcing the victims of competition through the administration of justice, police and the military to adjust to the "laws of the market economy". As a result, political dictatorship and economic liberalism could always go and in hand. A Pinochet did not have to first prove this.

In the first half of the 19th century, the political execution of liberal dogmas led to social catastrophes. There were more and more social rebellions, mass criminality exploded and epidemics spread in the industrial population centers. During the great Irish famine from 1846 to 1849, the British government in the name of free trade allowed 1.5 million people to die of starvation and forced 2.5 million to emigrate to America. Doctrinaire liberalism threatened to completely dissolve human society. At the same time many entrepreneurs began to call for the infra-structural state economy because they recognized that school education, roads, information networks and so forth were necessary for further accumulation of capital.

A great change of paradigms gradually occurred. More and more theoreticians accepted the necessity of an extended state economy. In 1867 the German economist Adolph Wagner (1835-1917) propounded the so-called "law of constantly growing state activity". Seldom has an economic prognosis been as confirmed by historical reality as this prognosis. A glance at the statistics in three significant western countries demonstrates this:

State Share in Gross Domestic Product (in percentages)

Year 1870 1960 1994
Germany 10 32 50
Sweden 6 31 69
US 4 27 32

Source: IMF/Wirtschaftswoche

Despite all relative distinctions, the state share historically has strongly increased everywhere. In the US, it increased 0.3 percent under president Reagan. For a long time, this high state share could only be sustained through a dangerously growing state indebtedness. Therefore economic liberalism experienced a new spring although its doctrine actually broke down in the 19th century. The neoliberals repeat the very ancient ideas of Mandeville and Smith. They claim that the prognosis of Wagner does not represent an economic law but only reflects political arbitrariness. Therefore they regard an historical trend reversal as possible. The fate "Leviathan" should be put on a "diet" and its functions largely "privatized". Nearly 130 years after the prediction of Wagner, the two IMF economists Vito Tanzi and Ludger Schuknecht recently drew up a counter-prognosis: from now on the state share should fall to under 30 percent in an opposite historical process.

To clarify the problem, the character of economic state functions must be understood. Like all representatives of economic liberalism, Tanzi and Schuknecht confuse the private production of goods for the market with the aggregate social conditions of the market itself. Liberalism imagines that most functions of the state can also be performed by private, profit-oriented businesses like the production of cars or hamburgers. First, the social risks of capitalism should be "privatized". In other words, the state should withdraw from the social responsibility that accrued in the last 100 years to its functions as a repressive monster. However history has shown that most people cannot individually bear the social risk for want of adequate income and are driven into hopeless situations. Liberalism prefers the costs for prisons and death squads to the costs of social assistance even if the costs of repression are greater in the long run and fattens "Leviathan" even more. As a result, the liberal doctrine shows its vicious irrationalism and advances its own criteria ad absurdum.

The absurdity of "privatization" is even clearer with other functions of the state. For example, ecological measures for protection of the environment cannot be organized as free enterprise transactions between private persons since the consumption of the improved environment cannot be isolated for a solvent demand. The air and climate cannot possible be stabilized only for the district of the rich. The environment can only be improved for the whole society or ruined for the whole society, irrespective of the purchasing power of individuals. Therefore protection of the environment can only be an exaction of the state. Sewage, waste removal and water supply can hardly be isolated for private demand. The public health system and the schools cannot be "privatized" without negative repercussions on society leading to new social costs.

Even when the functions of the state are assumed by private businesses, dissolving these functions in the market6 is an illusion. These expenditures then appear as state expenses since they must be accepted in large part by the state. When for example a new Mexican highway was privately built for the long-distance traffic of private investors according to criteria of profit, this was a great fiasco. The mammoth transportation companies and private motorists could not pay the new fees. The traffic rolled over the hopelessly overstrained public streets still free of charge.

Whichever way one looks, the presuppositions, conditions and consequences of the market economy are qualitatively different than the market economy itself. Aggregate social problems cannot be solved privately. Only the state "Leviathan" can assume these tasks in a society of competing individuals. This is also true for state subsidies whose drastic reduction will radically intensify the worldwide crisis. Large parts of industry and agriculture in nearly all countries would be ruined without these subsidies.

The relation of market and state in the process of modernization can be summarized in the formula of a general rule. The more market, the more state. The relation of the blindly competing "windowless monads" and the monster "Leviathan" is like Dr. Jekyll and Mr. Hyde. Therefore the doctrine of economic liberalism is just as false as the prognosis of the IMF economists Tanzi and Schuknecht. The inflated market and the inflated state can only live or die together.

homepage: homepage: http://www.mbtranslations.com
address: address: mbatko@lycos.com

About the translator 03.Oct.2002 11:54


Marc Batko, the translator of this article, lives in Portland, Oregon. A scholar of liberation theology, Marc has been posting his translations of German political, philosophical, and spiritual writings to the portland indymedia newswire for over a year. His website features a treasure trove of content on topics such as Human Rights, Economics, Anti-Military work, and Christianity. Marc's goal, in his own words, is to "enliven discussion on the myths and misconceptions that have led to our mental captivity, to break the shell of hyper-individualism and American unilateralism and proclaim the traditions of resistance and interdependence that could empower us to true life." Marc deserves great kudos for his contributions to discourse on indymedia and to the community as a whole.

Tony Blair loses vote 05.Oct.2002 14:28


Tony Blair faces first major defeat over privatisation at Labour Party conference
By Kris Lawrie and Fred Weston

Tony Blair thought he had buried the "Old Labour Party" and had put in its place so-called New Labour with all its spin and arrogant bravado. But at this year's annual Labour Party conference it was quite clear that the old traditions of the Labour party are not dead at all. Blair is no longer looking so confident as he was only a few months ago. For only the second time since he came to power Blair has had to swallow defeat in his own party, on a key issue: the participation of private capital in the providing of public services (PFI). And he also came close to defeat on his plans to wage war on Iraq!

Just as at the Trade Union Congress a few weeks earlier, in this year's Labour Party conference we are witnessing the first steps in what will prove to be a major turn around inside the Labour Party over the next period. It was clear before the conference began that Blair and all he stands for were going to be tested, perhaps for the first time since he came to power.

Yesterday on the first day of the annual British Labour Party conference two controversial motions were debated, one on the government's Private Finance Initiative and the other on the question of the war in Iraq.

Three of the biggest trade unions (in the public sector) UNISON, TGWU, and the GMB, tabled a motion that called for a survey into the cost-effectiveness of PFI. As we have reported before, this government initiative is a continuation of the capitalist policies of the Tories, and is a license for banks, building companies, and service contractors to make easy money at the expense of the workers. PFI leads not only to inefficiency and a reduction in the quality of services, because the capitalists who run the services want to squeeze out as much profit as possible, but it is also extremely expensive.

In the case of Edinburgh's new PFI hospital, the public will pay 900 million over a 30- year period to a private consortium to run the hospital that would cost 180 million if the government paid for it directly. At the end of the 30-year period the hospital and the land it is built on will revert back into the property portfolio of the private owners and they will offload prime development land for a nice profit.

The transfer of "privatised" staff from public to private sector employment is of particular concern to the unions. This system has created a two-tier workforce, where it is unclear whether the same employment rights or wage increases will apply to these workers.

The motion backing an independent review of whether PFI provides value for money was carried decisively: 67% in favour to 33% against. The delegates also rejected a hastily drafted statement written by the Labour Party National Executive backing PFI. Government was forced to take comfort where they could find it. And the only comfort available was in the fact that the majority of delegates from the constituencies (that is the territorial branches of the Labour Party) did not vote for the review. In other words it was the union vote that pushed through the motion.

An indication of the mood was the reception delegates gave to Paul Boateng, the Chief Treasury Secretary, as he attempted to defend PFI. He was booed, heckled, and slow hand-clapped as he wound up the debate. There is a strong and growing mood, not only among activists, but also among the population as a whole, against private involvement in public services. People have witnessed the very real, as well as financial, disasters on the railways, and now the nuclear industry. People also fear that air traffic control will be next in line for a major disaster thanks to private involvement.

The second controversial motion was the one on Iraq. It was clear that the Labour leadership were panicking about they way things might go. They withdrew their own motion before it went to discussion and vote, because they thought it would be defeated. Instead they put forward a watered down alternative, which implied that any action would first have to seek UN approval. This was eventually adopted by 60% to 40%. The press have characterised this as a tactical withdrawal. It in fact shows their weakness when the Blairite leadership cannot get support for its own motion on the war.

A motion unconditionally opposing the war was put forward and discussed. This argued that military action would increase the suffering of the Iraqi people, and worsen the instability in the Middle East. Alice Mahon MP of the left Campaign Group, made the point that "this isn't going to be a war about weapons of mass destruction. It will be the first war waged about oil, waged by the world's biggest oil consumer."

Conference delegate Eileen Sinclair (Cunningham South), said that the US would go in and bomb everything, creating more misery, and she pointed out that "the Iraqi people themselves, with the pressure of the world behind them, must depose Saddam Hussein - not us with bombs."

Despite the fact that this motion was defeated 40.2% to 59.8% the Blairites can draw little consolation from such a narrow vote. 40% in favour of the motion, shows that there is widespread opposition to the war in the British labour and trade union movements.

However, the vote against the war was even higher among trade union delegates, 48% of whom voted against. This compared to 32% among party delegates. This is no accident, and is fully understandable. In the past the right wing of the Labour Party could count on the their friends at the tops of the major trade unions for support. An example of this was Sir Ken Jackson, the recently ousted general secretary of the AEEU (now called Amicus, the engineering workers' union). One by one these old right-wingers are being ousted. A new more militant layer is coming to the fore and this is being reflected at every level of the trade union movement. As we predicted, this is now having an effect within the Labour Party itself. It is in the workplaces that workers are feeling the pinch. The process of radicalisation inevitably starts inside the trade unions. But this inevitably had to spill over into the Labour Party itself. There is an organic link between the trade unions and the Labour Party. The party could not remain immune to this process. Already there is opposition in the party branches. As trade union activists draw the conclusion from their struggles that they must get involved politically they will start to fill out the party branches and on this basis opposition will also be strengthened in the constituencies.

The past twenty years or so were years of lull in the movement. Over this period the right wing strengthened its grip on the trade unions. This in turn strengthened the shift to the right inside the Labour Party and eventually allowed Blair to claw his way to the top of the Labour Party and carry through the bosses' agenda under the banner of so-called "New Realism".

In the past the Labour Party constituencies were to the left of the unions, and their motions and resolutions were opposed at conference by the trade union block vote. However, over the last year especially, we have seen this process reach its limits. Now it is turning into its opposite.

As the Marxists explained, the radicalisation of the movement has occurred first in the unions - this is because workers have spent their time struggling against the attacks of first Tory and then Labour governments. Workers see the problems in the course of their everyday lives. For whole a period hey could not see a way out. They were not given a lead. Now, however, the accumulated frustration has boiled over. This has led to the election of a "new breed" of young, confident, left-wing leaders, an increase in strike figures, and a growing awareness of the need to fight back.

Workers have had enough of attacks on their pay and conditions, and the deterioration of the public services, such as the railways, the schools and hospitals. John Edmonds General Secretary of the GMB, (by no means a hard left) said in a recent interview: "Over and over again the price of PFI failure is paid for by cuts in staff, cuts in quality, and a reduction in patient care."

Now that Ken Jackson and his kind, which were a dead weight around the necks of workers, have been jettisoned, the unions are going forward. They have moved ahead of the constituencies of the Labour Party. And this was revealed in the voting patterns yesterday. But this is only the beginning of a more long-term process. At the moment many local branches of the Labour Party are empty, to all intents and purposes. Over the past period many of the more militant activists dropped out and, understandably, saw no point in attending.

Now it is ironic to see how a demand which some sectarians on the fringes of the movement supported is being taken up by the bourgeois press. The bourgeois press are now raising the question of breaking the link between the trade unions and the Labour Party. As Marxists we have always been opposed to this demand. Now that the bourgeois strategists are raising this demand we can show how right we were in resisting this demand. Why do the bosses want to break the link? Because they know that through the trade unions will come a wave of opposition inside the Labour Party that will shake it from top to bottom. So long as the unions were bastions of the right wing they had no problems. Now they see the unions as the enemy. As often happens in history the sectarians unknowingly play into the hands of the bosses and the right wing. Now is not the time to break the link. Now is the time to send more and more union members into the Labour Party. The vote at yesterday's conference confirms this. The unions can become the tool with which to transform the Labour Party!

The bourgeois commentators are also raising the question of state funding of political parties. The Labour Party depends to a very large degree on funds provided by the trade unions. State funding is seen as a way of cutting across the new danger of the trade unions' influence inside the Labour Party.

We must oppose tooth and nail these proposals, which would play into Blair's hands. Up until recently to defend such ideas meant we had to go against the stream. Now the stream has begun to flow against Blair. Opposition is building among the unions. At this year's TUC already the currents of opposition were there. The leadership narrowly won a vote on the war. Next year the right wing will have lost most of its remaining support. The shift to the left will lead to a radical transformation of two giants of the labour movement, the TGWU and Amicus. On this basis next year's TUC congress and Labour Party conference will see even greater opposition.

The Blair government is entering a period of crisis. The effects of privatisation will become clearer as time goes by. The economy is facing recession. Blair will have nothing left to offer. He and the clique around him will, more and more, come into conflict with the trade unions and his own party.

It is early days yet, but whatever Blair does he cannot avoid his fate. He has picked a fight with the fire fighters, the London Underground workers, and the local government workers (and he is squaring up to face many others). At the same time as preaching wage restraint to public servants he is throwing money to the privateers who run the PFI schemes, and preparing to spend billions of pounds on a war with Iraq. Whatever he does he will inflame the discontent of workers and the youth. He is paving the way for a struggle between the classes that will see the Labour Party reclaimed, transformed, and restored as a political fighting organisation of the working class.

October 1, 2002

See also:

The Perfect Storm by Rob Sewell. (September, 2002)
Victory to the firefighters by Kris Lawrie. (September, 2002)
Interview with Jeremy Dear (September, 2002)
New militant chapter opens for the British trade unions by Rob Sewell. (September 12, 2002)
Militancy on the March - The Change Taking Place in the Unions By Phil Mitchinson. (September 2, 2002)
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